U.S. stock indexes again appeared to be working from different playbooks midday Tuesday, following up on two recent sessions of divergence. The Nasdaq surged as much as 0.9% before giving back a bit of that rebound, and is up 0.6%. The S&P 500 crawled nearly 0.2% higher.
X Meanwhile, the blue-chip Dow Jones industrial average shuffled lower by less than 0.1%, and the small-cap Russell 2000 stepped back 0.3%.
The prior four sessions through Monday involved two days of distribution in the Nasdaq, while the other indexes stayed calm.
Distribution, as noted and tracked in IBD’s The Big Picture column, involves a sizable loss in rising volume in a major index. Distribution points to institutional selling.
Volume in the stock market today was down emphatically on both major exchanges midday Tuesday.
Chip stocks were rebounding after recent weakness, which helped the Nasdaq.
In the IBD 50, a list of the best stocks in fundamentals and technicals, three stocks were up more than 2%. The three were chip designer Nvidia (NVDA), computer networking stock Arista Networks (ANET) and chip equipment maker Applied Materials (AMAT). Volume was up sharply for all three stocks.
Blue chip stocks were mostly down, but the bigger moves came on the upside.
Jefferies upgraded McDonald’s from hold to buy and raised the price target from 150 to 200. McDonald’s closed at 170.65 Monday, so Jefferies is expecting a 17% upside. McDonald’s partnership with Uber on deliveries is expected to help sales. Currently, Uber delivers Mac’s food only in select urban areas.
IBD’s TAKE: McDonald’s stock is extended from a September breakout. Microsoft is shaping a base with an 86.30 buy point. For a detailed look at IBD’s ratings for McDonald’s and Microsoft, go to Stock Checkup at Investors.com.